[Code of Federal Regulations]
[Title 24, Volume 4]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 24CFR906.19]

[Page 364]
 
                 TITLE 24--HOUSING AND URBAN DEVELOPMENT
 
CHAPTER IX--OFFICE OF ASSISTANT SECRETARY FOR PUBLIC AND INDIAN HOUSING, 
               DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
 
PART 906_PUBLIC HOUSING HOMEOWNERSHIP PROGRAMS--Table of Contents
 
                    Subpart C_Purchaser Requirements
 
Sec. 906.19  Requirements applicable to a purchase and resale entity (PRE).

    (a) In general. In the case of a purchase of units for resale to 
low-income families by a PRE, the PHA must have an approved 
homeownership program that describes the use of a PRE to sell the units 
to low-income families within 5 years from the date of the PRE's 
acquisition of the units.
    (b) PRE requirements. The PHA must demonstrate in its homeownership 
program that the PRE has the necessary legal capacity and administrative 
capability to carry out its responsibilities under the program. The 
PHA's homeownership program also must contain a written agreement (not 
required to be submitted as part of the homeownership plan) that 
specifies the respective rights and obligations of the PHA and the PRE, 
and which includes:
    (1) Assurances that the PRE will comply with all provisions of the 
HUD-approved homeownership program;
    (2) Assurances that the PRE will be subject to a title restriction 
providing that the property must be resold or otherwise transferred only 
by conveyance of individual dwellings to eligible families, in 
accordance with the HUD-approved homeownership program, or by 
reconveyance to the PHA, and that the property will not be encumbered by 
the PRE without the written consent of the PHA;
    (3) Protection against fraud or misuse of funds or other property on 
the part of the PRE, its employees, and agents;
    (4) Assurances that the resale proceeds will be used only for the 
purposes specified by the HUD-approved homeownership program;
    (5) Limitation of the PRE's administrative and overhead costs, and 
of any compensation or profit that may be realized by the PRE, to 
amounts that are reasonable in relation to its responsibilities and 
risks;
    (6) Accountability to the PHA and residents for the recordkeeping, 
reporting, and audit requirements of Sec. 906.33;
    (7) Assurances that the PRE will administer its responsibilities 
under the plan on a nondiscriminatory basis, in accordance with the Fair 
Housing Act, its implementing regulations, and other applicable civil 
rights statutes and authorities, including the authorities cited in 
Sec. 5.105(a) of this title; and
    (8) Adequate legal remedies for the PHA and residents, in the event 
of the PRE's failure to perform in accordance with the agreement.
    (c) Sale to low-income families. The requirement for a PRE to sell 
units under a homeownership program only to low-income families must be 
recorded as a deed restriction at the time of purchase by the PRE.
    (d) Resale within five years. A PRE must agree that, with respect to 
any units it acquires under a homeownership program under this part, it 
will transfer ownership to the PHA if the PRE fails to resell the unit 
to a low-income family within 5 years of the PRE's acquisition of the 
unit.